UPDATE 1-CymaBay Therapeutics scraps liver disease studies; shares plunge

(Adds details on studies, background on NASH treatments)

Nov 25 (Reuters) - CymaBay Therapeutics Inc said on Monday it was scrapping two mid-stage studies testing its lead drug for two types of liver diseases after observing "atypical" findings in one of the trials, sending its shares down 79% in premarket trading.

The atypical findings in non-alcoholic steatohepatitis (NASH) were observed in patients who had shown an improvement in their condition during the trial, or had shown signs of disease stabilization, it added.

The second trial was testing the drug in patients with primary sclerosing cholangitis, a chronic disease that damages the bile ducts.

The drug developer also said it was putting a hold on all studies of the experimental drug, seladelpar, in patients with primary biliary cholangitis, a third liver disease.

The company said it had started a series of investigations to better understand its findings.

The announcement comes after the failure of Gilead Sciences Inc's NASH treatment in a mid-stage study, and a separate trial failure of rival Conatus Pharmaceutical Inc's experimental NASH drug, earlier this year.

NASH is a chronic liver disease characterized by excess fat, inflammation and cell damage in liver that can cause fibrosis or scarring of the organ, ultimately leading to cirrhosis or liver cancer.

Successful treatments for NASH have remained elusive, but the market remains lucrative with some analysts having projected it could reach as much as $20 billion by 2030, as people with fatty diets increasingly develop the disease. (Reporting by Manas Mishra in Bengaluru; Editing by Rashmi Aich)